After two decades helming the group, Doug Bibby announced last week that he would step down as president of the National Multifamily Housing Council (NMHC)
effective January 2021.
Under Bibby’s leadership, NMHC has become a powerful voice for the apartment industry on issues ranging from the shortage of affordable housing to diversity in the hiring practices of apartment companies. The group’s built a track record of success in its efforts for advocacy, producing critical insights and data (including its benchmark annual NMHC 50 lists) and organizing meetings around the country.
NREI talked with Bibby about his 20 years at the top of NMHC and how the organization has changed the business.
This Q&A has been edited for style and clarity.
NREI: The shortage of affordable housing is one of the biggest issues facing the apartment industry and the country as a whole. How has NMHC made a difference?
Doug Bibby: This has been a problem in the making for decades. A lot of very smart people have tried to tackle this problem and it is getting worse.
What do we do about it? We tried to organize ourselves in a way that we could provide resources to our members. How can we help them be a part of the solution? The biggest cost in the production of affordable housing is the physical cost of constructing the buildings. That is anywhere from 60 to 70 percent of the cost of putting a unit into the market. We are looking at a few techniques—building simpler designs, fewer amenities.
And then the other is driving down costly regulations that are really inhibiting our ability to produce affordable housing and are adding to the cost to build. Those can range from a really very lengthy and costly entitlement process to exclusionary zoning. It can be parking requirement that are way out of date with reality. It can be excessive fees.
This administration and HUD [are] leading the charge on this this to figure out how to keep sensible regulation in place but also get rid of the things that are truly driving up the cost and have really no basis to be used to inhibit affordable housing.
NREI: NMHC has led successful advocacy campaigns across issues from affordable housing to land use regulation to rent control. How has NMHC been able to participate meaningfully in these discussions?
Doug Bibby: I have stuck to one philosophy from that day I walked in 19 years ago to today, and that is, “Be credible.” Lead with the facts. Don’t try to come in with hyperbole. I think that we are seen as a credible source of information.
But also we have produced some really good products, whether it is a Vision 2030 document that really spells out the pressing need for more housing and where that need exists. There is the Housing Affordability Toolkit that we came out with, which is solutions-based so that policymakers have something that they can chew on. Or the Growing Homes Together website that we created. All of these are not put out there to say, “Aren’t we great as apartment developers and owners and managers? Isn’t NMHC great?” These are the facts in front of us.
Going back to the Vision 2030 document, we went to a third party and said, “Let the chips fall where they may. Tell us in your best estimation where will the demand be for apartments through the year 2030.” We have it by metro area. We can go in a talk to members of Congress and say this is what your state is going to need. We establish credibility by doing that.
I also think that we have a seat at the table frankly because we are politically active. We have a very strong PAC and we support both sides of the aisle very equally. We just support legislators who support sensible change in housing.
NREI: What hasn’t worked?
Doug Bibby: What has made it harder for us is that we are a national organization… We are talking to the White House. We are talking to both houses of Congress. And we are talking to the federal regulators like EPA and HUD and others. We don’t have the resources to have our tentacles out into the states. That is where the onerous creep of regulation has really hit us, in the states and localities. That is hard for us to tackle from this federal perch. That is why we have worked together very closely with the National Apartment Association (NAA) over the years to try to use their state and local affiliates with all the contacts that they have. NAA is situated in every state capital.
What has made it even more difficult over the last three years, are these rent control and rent capping initiatives, which have now taken place in Oregon and California. We are having to fight a sort of rearguard action in other states too, to try to get them to have more sensible solutions. We are being distracted by failed housing policies that have failed for the last 40 years or 50 years... Lawmakers are shooting themselves in the foot in trying to solve the problem. We need more supply and they are putting barriers up in front of us.
NREI: NMHC has worked to make the industry more diverse. How has NMHC been able to make a difference?
Doug Bibby: We really have got to be a role model. This really started with Peter Donovan from CBRE, who really encouraged us to begin a really concerted effort for diversity, which became diversity and inclusion.
What we tried to do is show, “What do best practices look like?”… What you have to do is not settle. Like when your recruiter is coming back to you and says, “Here’s your list,” and it’s got only white males on it. High schools and colleges today are pouring out a diverse group of students. Women are now dominating the MBA programs, the law schools and so on. When I go out to speak at colleges and universities I look across the landscape and it is incredibly diverse. The talent pool is coming our way and you better try to figure out how you can put yourself in a position to compete.
I was very proud of creating the Diversity & Inclusion Initiative program. We put on forums every year. We have a women’s networking event. I raised money from almost 30 other real estate trade associations to create something we called “Careers Building Communities.” It is a website that we created. It has tools. It has a quiz. It has careers that we have highlights for every sector that you can think of in real estate.
NREI: Over the last few decades, multifamily has become an institutionalized asset class. Was this inevitable? How did NMHC help institutional investors accept multifamily more quickly?
Doug Bibby: It was not inevitable. Because when I took this job, and I spoke to institutional investors here or sovereign wealth funds or institutional investors from outside the U.S. that had very little understanding of our sector and how it worked. Their perception was it was a riskier sector investment because they were more comfortable with office. There were brand names they could look to there. There were no brand names in multifamily housing. AvalonBay and Equity Residential were not brand names back then.
They began to understand that these are really consistent reliable returns on our investments. Then office and retail got disrupted. The risk-adjusted returns in our business have far surpassed other sectors. We did a study through the NMHC Research Foundation that showed that over 15 years, 10 years and five years that multifamily was the highest performing sector of real estate.